"Hi Everyone I am currently reviewing the Performance Management system of a Bank making it a more integrated and aligned tool that would measure the performance of the organization, department and individual. How do you align the performance of a department to the individuals in that department in terms of scoring distribution? How do we create that link/equation? For example, if the scoring distribution of a department is skewed to the right, how do we ensure alignment with the performance of that department?"

Some name

Hi David,
I would like to share some tips for your issue. I hope it will help you.

1.First of all, initiate Business Planning exercise across your organization(On yearly/Quarterly basis).All the Business Units/Offices/Departments must chalk out the plan for operational and developmental areas in their Office/Department mentioning the Key Result Areas(KRAs) ,KPIs(Key Performance Indicators) and goals for the year along with project completion timelines and responsibility levels.

2.Develop a Performance Management System which captures both what(goals) and how(Competencies) aspects of performance. Goal-setting on MBO basis and Competencies as defined in Competency Dictionary(Developed for different responsibility levels).

3.PMS Cycle :Planning ? Managing ? Appraisal. At each stage policy guidelines should be issued for consistent compliance of SOPs.
4.For providing an opportunity to aggrieved employees, Appeals Process must be in place to have an insight into distortions in system as well.

How do you ensure that the scoring distribution of your department is aligned to the performance of the department?

For example, the department has underperformed but looking at its overall individual assessment, the scoring distribution is skewed to the right which is illogical. How do you create that link to demonstrate this irrational.

It's a tricky one because if the department has underperformed like you are saying it follows that the team members cannot have all performed extremely well that the curve is skewed toward to the right.

There could be several reasons to that

1. The team members objectives not having been aligned to the departmental objective.

Assuming that departmental objectives were drawn first all individuals in that department should contribute towards achieving the departmental objectives to an extent that if they don't perform well it impacts negatively on departmental performance, if they do it will impact positively on departmental performance. So, there won't be a lot of disparity between collective individual performance and departmental .

2. The tools used

In some cases when you take at face value the performance of the two; individuals and the department there is correlation between the two but when you input the quantitative assessment you get something else it might be because of the tools used. For example if an individual's is heavily weighed on new business ideas generation and that constitute a small magnitude of the departmental performance it means such an individual have be an ""exceptional performer"" and the department be ""poor performer"" . In such cases there was alignment of individual objectives feeding into departmental ones but the tools distorts the results.

As HR Practitioners we get labeled when we try to explain that such a department cannot have ""high fliers"", they were high flying feeding into what if the department performed poorly? If not managed well such team members will get rewarded handsomely and employees who happen to be in departments which have performed well do not get rewarded

Therefore, there is need for a calibration process to address such anomalies and influence the results in order to have ""LOGIC""

Your question is very interesting because it has always been a problem with alignment of departmental goals with that of the individual.

The first question could be that the goals identified for the individual have not been strictly aligned with that of the department. It would then indicate that as an individual you can perform very well and the department can under perform.

Second look at how the assessment was done. This could indicate that the assessor was not objective in his/her scoring or other factors influenced it. The human factor. This could indicate additional training for the assessors or more clarification about the objectivity of the process and that it is not directed at an individual.

The question of balancing these two aspects have plagued HR and psychologists for years and I suspect will still for next couple of years.

I would suggest looking at all the appraisals in depth and analyzing it for flaws not just in that character but also how the assessor interpreted the questions or goals of both the department and the individual. You may find that certain appraisals was done very well and objective and others clearly not. That should provide a clearer picture. Next would be to meet with that assessor and have a combined analysis from their perspective. That will give you an idea of how to change or adapt the appraisals next time.

Jerome Vencencie ? HR Manager ?Skype: jeromev5

Posted by David2025
on Jan 7 at 5:32 AM

Hi Seema

Thanks for sharing those tips.

How do you ensure that the scoring distribution of your department is aligned to the performance of the department?

For example, the department has underperformed but looking at its overall individual assessment, the scoring distribution is skewed to the right which is illogical. How do you create that link to demonstrate this irrational.

There is one more thing to consider here -- the importance of contextual factors. In a scenario where a department has underperformed based on objective indicators because of something that is outside individuals' control (downtown in the economy for example), you can and will have a department of high performers in an underperforming department.

Answered

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Carl Nielson

January 07, 2011 10:08 AM

Everyone seems to be touching on the issue:
1. Organizational business goals guide the development of department purpose, goals and objectives which lead to individual role key accountabilities and measures of success.
2. An objective, valid process is needed to identify the key accountabilities in such a way that it defines the talent required to perform that job and properly aligns the behavior of the individual naturally toward department goals.
3. The right person can be hired for the position/role. The wrong person can more easily be identified sooner to allow for changes to be made.

Note: Relying on annual performance reviews to identify you have a mismatch of person to the job is very inefficient and lacks a sense of organizational urgency. The result: the department underperforms.
Video for a better approach: http://penguin.ttiltd.com/bandwidth/benchmarking_eLearnings/Job_Benchmarking_Process/

Hi David
That is indeed the burning question! Too often the results of performance appraisals have no relationship to the performance of the department.

The answer is to align the expectations of each individual, in terms of OUTCOMES with the accountabilities and objectives of the department. Expectations fall into two categories - those that are ongoing - things that people need to do day in and day out - which should be part of their job role expectations, and, as an extension of that those aspects of performance for which the department has targets or measurable business objectives. You need to make sure that the job descriptions of each individual are aligned to the outcomes expected of the department, with nothing omitted, and that you have a system for cascading the objectives of the department to each relevant individual. In many organizations requiring everyone to have objectives is an exercise in futility - many roles are routine and objectives are not relevant. Your performance appraisal system must be able to assess individuals against their individual job role.

Including competencies in performance appraisal is the prime reason why performance appraisal results don't match up with departmental or organizational performance. Competencies are the knowledge and skills that we assume are needed for performance - they are not performance. Performance means outcomes. Judt having the knowledge and skills does not guarantee performance - there are other factors involved.

For more information on how to align individual and organizational performance - see our website - www.centranum.com suggested papers "" A Problem worth fixing"" , ""Confounded by Competencies"".
Leanne

Answered

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busperf

January 08, 2011 06:34 PM

Hi David. There is no simple solution to your predicament.

As Leanne says, to get a good correlation between individual employee scores and the department score, you need to eliminate competencies from the scoring process. And that goes for skills/behaviors/values, etc. Each employee score must be a score of individual outcomes –and outcomes that are 100% relevant and weighted to the department outcomes.

All process/activity measures will also need to be eliminated from individual appraisals. Otherwise, you will get what Meisha-ann mentioned; external factors unrelated to employee effort disconnecting the individual and department scores. You can now see the massive task you have on your hands; the task of working out exactly how each and every task of each and every employee contributes to department outcomes. And then to convert those tasks to a set of weighted outcome-style objectives for each and every employee. But even then, many department outcomes depend on what people are doing in other departments. A warehouse picker delivering parts 95% on time to the production line depends on whether the guy in purchasing purchased the right parts.

Some organizations attack this problem by holding ""calibration"" meetings with appraising managers. In these meetings, each employee's score is put on the table for discussion. Not only is this approach time consuming and post-hoc, it can also lead to a huge political bun fight.

One major challenge with this ""scientific"" calculus approach is that given all the work put in to creating the formulae, by the time of the end of period appraisals, the organization's, departments' and employees' objectives will have changed. Another challenge is that the performance of a department and of an organization isn't simply an aggregate of the performance of each individual in isolation. How groups of individuals work together and how departments collaborate to achieve the organization's objectives is just as, maybe even more, important than the effort of each individual.

How do you measure the synergy between individuals and between departments? Focusing entirely on the outcomes of each individual and aggregating those as an explanation of department success or failure may miss the systemic and interrelatedness aspects of an organization that we perhaps need to notice more.

I'm not saying that we shouldn't set goals, devolve goals and monitor progress. I'm a big advocate of doing just that. It's just that the complexity involved in exactly aligning individual effort with department outcomes may not be worth the effort and may be distracting our attention from the importance of interrelationships and collaboration.